Redstar Transport collapse: 'They left me broke'

by Brent Davison

24th Jan 2019 6:00 AM
| Updated:
9:52 AM

ON DECEMBER 18 last year Ross Pettit, 62, returned to work as a linehaul driver following two months' sick leave. Two days later the company he worked for, Redstar Transport, collapsed and Ross became a six o'clock news bulletin statistic.

The collapse of the big national freight company in the lead-up to Christmas was as sudden as it was spectacular and instantly put some 300 drivers out of work.

"We were told to get our trucks to the nearest depot and to get back home as best we could," Ross Pettit recalled, saying drivers were literally left standing.

"I went to Dubbo that afternoon. The next day I went back to Melbourne and she was all over."

Ross Pettit doesn't know how his colleagues fared but says he is still to receive the two days' pay owed to him when the company went belly-up.

As a company to work for though, Redstar was "absolutely terrific", Pettit said.

"They had (driver's) rooms in Melbourne and Adelaide so all the linehaul drivers that had come in from different places - they'd come to Melbourne or whatever - had a room upstairs to bunk down.

"While they were waiting for a load that night they had their room where they could wait before they had to leave again."

When the company collapsed he had to quickly find somewhere else to go and getting back to his family in Hobart was impossible because he didn't have enough cash to cover the inflated Christmas season ticket prices. He spent Christmas alone in Melbourne.

"I had to get out of the (Redstar) building so I had nowhere to stay, no money, no nothing."

Pettit, who worked with Redstar for a little over 12 months, is now back in Tasmania. He has applied for a job with Toll, has completed the company's induction program and is waiting to hear if his application has been successful.

There are other desperation stories emerging. In Perth, for example, two stranded South Australian drivers pooled their limited resources, bought a cheap used car and drove back to Adelaide.

Wayne Hendricks, a NSW manager with Redstar-owned Intermodal Staffing, tells of a road train driver in the Northern Territory who, when told of Redstar's demise, parked his triple trailer train, climbed out, left the engine running and hitched a ride to Adelaide.

Hendricks, who says no one had any inkling of Redstar's imminent demise until it actually happened, has his own story to tell.

He was in the process of transferring to the parent company when the faecal matter hit the fan. With no entitlements paid and a week's wages still owing, he has joined the queue of ex-Redstar employees heading for Toll.

Intermodal was also a casualty of the Redstar collapse because of its part-ownership by the transport company.

Industry speculation suggests Redstar collapsed because it had been running too lean for too long, cutting prices to get work then trying to renegotiate with Toll, Star Track Express and others in a bid to lift its rates.

Unsubstantiated rumours also suggested Redstar had been trying to refinance its operations but failed in the attempt, that failure causing its downfall.

Transport Workers Union national assistant secretary, Nick McIntosh, said Redstar simply reached the point where it could no longer pay its bills because the company itself was not being paid.

"Sometimes they don't get their money within 30 days. Sometimes it takes 60 days, sometimes longer and when that happens all over the board that's the end of the story. I think it just got to a point where the finance companies said: 'well, we just can't keep waiting,'" Mr McIntosh said.

When Redstar reached the bottom of its black ink reserve there was not enough money left in the bank to even pay liquidators Price, Waterhouse, Coopers (PwC). Redstar had bled-out financially and any entitlements owed to its employees are unlikely to eventuate.

In the aftermath of the dramatic collapse there has been some recovery for the Redstar workforce. The TWU, working with other road transport companies including Toll, Linfox, Freight Assist Australia and ACFS, has helped find work for a substantial number of drivers and the process is ongoing. "To date," says Nick McIntosh, "some 150 former Redstar drivers have been interviewed (by Toll, Linfox and other companies) and 70 of them are now actively employed."

Toll spokesperson Zed Ivankovic said there had been a strong response from Redstar's drivers immediately after the company's demise and several have already found work.

"Toll continues to offer employment opportunities to former Redstar drivers. We have appointed 30 drivers to date. We are running an expedited recruitment process and we encourage drivers interested in exploring opportunities with Toll to call us," Ms Ivankovic said. The contact number is 1800069726.

Linfox was unable to give a number, saying in a statement only that it had agreed to offer jobs to disaffected drivers and encouraged them to apply for current and future vacancies.

Nick McIntosh said the TWU lobbied the Federal Government's Worker Protection Scheme for assistance from the Fair Entitlements Guarantee immediately after the Redstar crash, asking for a one-week interim payment but, so far, no help has been forthcoming.

In its prime Redstar was a national freight company with some 400 employees and offices and freight depots in Sydney, Melbourne, Brisbane, Adelaide, Perth and Dubbo. Its fleet consisted of singles, B-doubles and B-triples as well as double and triple road train combinations.

The company was not without its problems, however. It had been rigorously audited in 2017 after two boys were killed near Dubbo, NSW, when one of its trucks collided with a car in which the boys were travelling.

In that audit inspectors uncovered safety issues affecting brake and suspension systems. They also discovered evidence of logbook tampering.

Redstar bought-out Zagami Transport for an undisclosed amount in 2017, the deal adding some 250 prime movers and 700 trailers as part of the deal as well as extra warehousing space and more employees.

Ominously, Nick McIntosh says Redstar was the 469th logistics company to be placed into administration since the 2016 abolition of the Road Safety Remuneration Tribunal.

"That's probably thousands of jobs that have disappeared from the industry," he said.

Big Rigs was unsuccessful in its attempts to contact members of the Redstar management team.